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In two months, the legal minimum wage in the country of [#permalink]
06 Jun 2008, 12:31

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Difficulty:

95% (hard)

Question Stats:

46%(02:17) correct
54%(01:31) wrong based on 627 sessions

In two months, the legal minimum wage in the country of Kirlandia will increase from five Kirlandic dollars (KD5.00) per hour to KD5.50 per hour. Opponents of this increase have argued that the resulting rise in wages will drive the inflation rate up. In fact its impact on wages will probably be negligible, since only a very small proportion of all Kirlandic workers are currently receiving less than KD5.50 per hour.

Which of the following, if true, most seriously weakens the argument?

(A) Most people in Kirlandia who are currently earning the minimum wage have been employed at their current jobs for less than a year(B) Some firms in Kirlandia have paid workers considerably less than KD5.00 per hour, in violation of kirlandic employment regulation(C) Many businesses hire trainees at or near the minimum wage but must reward trained workers by keeping their pay levels above the pay level of trainees.(D) The greatest growth in Kirlandia's economy in recent years has been in those sectors where workers earn wages that tend to be much higher than the minimum wage.(E) The current minimum wage is insufficient for a worker holding only one job to earn enough to support a family, even when working full time at that job.

In two months, the legal minimum wage in the country of Kirlandia will increase from five Kirlandic dollars (KD5.00) per hour to KD5.50 per hour. Opponents of this increase have argued that the resilting rise in wages will drive the inflation rate up. In fact its impact on wages will probably be negligible, since only a very small proportion of all Kirlandic workers are currently receiving less than KD5.50 per hour.

Which of the following, if true, most seriuosly weakens the argument?

a) Most people in Kirlandia who are currently earning the minimum wage have been employed at their current jobs for less than a yearb) SOme firms in Kirlandia have paid workers considerably less than KD5.00 per hour, in violation of kirlandic employment regulationc) MAny businesses hire trainees at or near the minimum wage but must reward trained workers by keeping their paylevels above the pay level of trainees.d) The greatest growth in Kirlandia's economy in recent years has been in those sectors where workers earn wages that tend to be much higher than the minimum wage.e) THe current minimum wage is insufficient for a worker holding only one job to earn enough to support a family, even when working full time at that job.

Inflation is caused by too many dollars chasing too few goods with the resulting rise in prices. The central premise of the argument is that there wont be too many dollars out there in the market as the number of min wage workers are less in Kirlandia so the cummulative increase wont push inflation up. With this background, lets see the choices

A. Not relevant to increase money in the market.B. This is an interesting one. Since this has gone unreported, the recent rise wont touch these folks, they will continue to get considerably less anyway.C. If trainees get near minimum wage levels, so when the min wage levels go up, their wages will also go up. Hence this will have an effect of more money coming into the economy and driving up inflation....weakensD. Not relevantE. Not relevant.

In two months, the legal minimum wage in the country of Kirlandia will increase from five Kirlandic dollars (KD5.00) per hour to KD5.50 per hour. Opponents of this increase have argued that the resilting rise in wages will drive the inflation rate up. In fact its impact on wages will probably be negligible, since only a very small proportion of all Kirlandic workers are currently receiving less than KD5.50 per hour.

Which of the following, if true, most seriuosly weakens the argument?

a) Most people in Kirlandia who are currently earning the minimum wage have been employed at their current jobs for less than a yearb) SOme firms in Kirlandia have paid workers considerably less than KD5.00 per hour, in violation of kirlandic employment regulationc) MAny businesses hire trainees at or near the minimum wage but must reward trained workers by keeping their paylevels above the pay level of trainees.d) The greatest growth in Kirlandia's economy in recent years has been in those sectors where workers earn wages that tend to be much higher than the minimum wage.e) THe current minimum wage is insufficient for a worker holding only one job to earn enough to support a family, even when working full time at that job.

I went with E on this one because I made the assumption that some workers might be working more than one job on minimal wage. But the choice doesnt really talk about multiple minimum wage jobs.

I can see why C could be correct. The wage increases for minimum wage workers will mean other workers will need to be paid more.

My reasoning is that in B, if some workers were paid illegally before the increase of min wages, they in all probability will continue to get paid the same dollars, as the the thing is illegally done in the first place....so this wont increase the number of workers with more money....the cause of inflation per this argument.

My reasoning is that in B, if some workers were paid illegally before the increase of min wages, they in all probability will continue to get paid the same dollars, as the the thing is illegally done in the first place....so this wont increase the number of workers with more money....the cause of inflation per this argument.

Evidence: Minimum wage has been increased. Very small portion r currently receiving less than KD5.50 per hr. Inflatioin will rise.Conclusion: Change in minmum wages will be negligible.

We need to weaken the conclusion, that the change will indeed have an effect.

C.

A. Irrelevant.B. Irrelevant, since we r not talking about illegal workers.C. This will actually weaken the statement, b'coz 'many' business hire tranieers, and these traineers r at the minimum wages mark.D. This actually supports the argE. i think it is irrelavant. Even if it is not, it would only strengthen the arg.

(A) Most people in Kirlandia who are currently earning the minimum wage have been employed at their current jobs for less than a year Irrelavant(B) Some firms in Kirlandia have paid workers considerably less than KD5.00 per hour, in violation of kirlandic employment regulationMay Be. Keep it for later.(C) Many businesses hire trainees at or near the minimum wage but must reward trained workers by keeping their pay levels above the pay level of trainees.Irrelavant since the argument is not comparing different levels in labor grade as well as the argument doesn't provide any info on where the pay levels are for the "trained" resources.. And use of strong word "must". MGMAT recommendation is to avoid answers with strong words.(D) The greatest growth in Kirlandia's economy in recent years has been in those sectors where workers earn wages that tend to be much higher than the minimum wage.Irrelavant since argument is not trying to differentiate between different sectors(E) The current minimum wage is insufficient for a worker holding only one job to earn enough to support a family, even when working full time at that job.Irrelevant to the argument

Argument "impact of hike in minimum wages will be negligible".Question :- which statement will seriously weaken the argument.

option C) Many businesses hire trainees at or near the minimum wage but must reward trained workers by keeping their pay levels above the pay level of trainees.

If many business higher trainees at minimum or near min. wages , then after increase in wages , this bar (wages of trainees will increase), hence it will have an impact on the overall wages - but there is a catch , how many trainees will make the impact sizable, this is subjective information, depending on author's view of sizable impact.

option B) Some firms in Kirlandia have paid workers considerably less than KD5.00 per hour, in violation of kirlandic employment regulation

if some firms violate the kirlandia law and pay their workers less than minimum wages, then they will continue to do so in future also , therefore no impact on minimum wages, it actually supports the argument.

IMO C , although option C is marred with its own problems, but at the end we only have to choose the best option and go to next question... _________________

Sun Tzu-Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.

(A) Most people in Kirlandia who are currently earning the minimum wage have been employed at their current jobs for less than a year --Still inflation can rise.

(B) Some firms in Kirlandia have paid workers considerably less than KD5.00 per hour, in violation of kirlandic employment regulation -- still inflation can rise

(C) Many businesses hire trainees at or near the minimum wage but must reward trained workers by keeping their pay levels above the pay level of trainees. --if wages is increase ..more capital inflow in the market .. so therefore, it's supporting the argument

(D) The greatest growth in Kirlandia's economy in recent years has been in those sectors where workers earn wages that tend to be much higher than the minimum wage. -- Inflation still can go up

(E) The current minimum wage is insufficient for a worker holding only one job to earn enough to support a family, even when working full time at that job. ---Author failed to consider another important factor - the livelihood worker .. so this is correct answer

This is a difficult question. Eventually, I narrowed it down to B or C. I'm not sure I agree with OA because there is nothing in B that states companies will be compliant with the wage increase. If they continue to deflate wages then there should be no net change when the wage increase in implemented.